When divorcing in BC, couples typically sell their home and split the profits after paying off the mortgage. The process involves setting a fair price, listing the property, and agreeing on the best offer. Legal guidance helps ensure fair division and a smooth sale.
When homeowners divorce, they must decide what to do with their home. Asset division is almost always a given of a divorce. For homeowners, that involves dealing with the house. A divorcing couple has three clear options.
Option One: Sell the Home
The most simple approach: is to sell the home and split the profit. This is the most common choice for most couples when they split up. Both partners sign a listing agreement. Both pay the single realtor fee. The realtor works on behalf of both partners to satisfy their collective desire to liquidate the home.
It’s common for both partners to move out and obtain housing otherwise. Often, if the couple have kids, the primary caregiver will retain the house until the sale, while the other partner lives on their own. When the home clears, the profits are split between both partners after the balance of the mortgage is settled up.
A realtor helps to set a fair price. He handles showings and manages offers as they come in. When the offers come in, the couple will need to work together to agree to the best offer in terms of closing date, sale price and the other aspects of a given offer. A realtor will work with the couple to set the price of the home compared to other properties of a similar house age, size, rooms, lot size, etc.. There are no apple-to-apples comparisons in house sales. Likewise, the market is perpetually moving. What a comparable property sold for three months ago may not fetch the same price possible today. Again: an experienced realtor will set a realistic and attainable price target.
Steps to Sell Your Home During Divorce
- Agree to sell and sign listing agreement
- Set market price with realtor
- Prepare the home for showings
- Review and agree on offers
- Split profits after closing
A quick close can allow the couple to untie the knot quickly, but if one of the partners and the extended family are still in the home, it could make the exit hectic. A longer close could both be a hard won concession and it will draw out the conclusion of the sale. It’s important to weigh out the pros and cons. Dale Sheppard has been a part of over 1600 home sales. If a couple wants to talk about selling their home, contact Dale.
Option Two: One partner Keeps the Home
Simply put: one partner keeps the home. The other partner moves out. In most cases, there is still a mortgage. The partner who remains must show their bank that they can carry the mortgage alone. That can be a big hurdle to clear. Lenders in British Columbia will check income, credit, debts, and current mortgage rules. If the lender agrees, the partner who stays must refinance the mortgage in their own name.
A buyout requires a fair value for the property. Most couples hire a certified appraiser to set this value. The appraisal helps both people see the worth of the home and the size of the buyout.
A buyout usually works like this:
- The home is appraised.
- The remaining equity is calculated.
- Each spouse’s share is confirmed.
- The partner keeping the home refinances the mortgage and pays the other spouse their share.
Legal advice is important in British Columbia because property division rules can affect the share each partner receives. A lawyer can confirm rights under the Family Law Act, explain how exemptions work, and prepare the required separation agreement. This agreement often must be completed before lenders approve the refinance.
The partner who takes the home gains stability and keeps a familiar place. They also take on full responsibility for all costs. This includes mortgage payments, taxes, insurance, repairs, and any future market changes. They also lose the benefit of the other spouse’s income.
A buyout works best when:
- One spouse can qualify for the mortgage.
- Both people agree on the value.
- The buyout amount is clear.
- The refinancing process moves smoothly.
If the partner staying cannot qualify for a new mortgage, the buyout may not be possible, and the couple may need to sell the home. Couples often compare both options before making a final choice.
For many people in British Columbia, this option offers a clear path forward after a separation. It allows one spouse to keep the home while giving the other spouse a fair share of its value.
Option Three: Rent the Home
Both people stay on title. You keep ownership and turn the home into a rental.
You lease the home to tenants and collect rent. You share the income based on your agreement.
You also share the costs. This includes mortgage payments, taxes, insurance, repairs, and property management fees.
Many couples choose this option when they want to delay a sale. Some wait for a stronger market. Others want to reduce disruption for children. The decision must be mutual. If one person disagrees, this option will not work.
Shared ownership after separation adds pressure. You must agree on money, repairs, access, and timing. You must respond to tenant issues. You must share decisions that affect the value of the home. This option requires steady communication. It also delays a full financial break, which some people find difficult.
Your Responsibilities in British Columbia
If you keep a home together after separation in British Columbia, you follow clear steps:
- The estranged couple will need to tell your lender about the separation. Lenders require updated information about who is responsible for payments.
- Update the land title through the Land Title and Survey Authority of BC if legal changes are needed. For example, post divorce, some people go back to their pre-married names and the title would need to reflect that.
- The partners set clear rules for how to split mortgage payments, taxes, insurance, utilities, repairs, and rental income.
- Both partners need to keep the home in good condition. This protects equity and prevents disputes about maintenance.
- The terms need to be spelled out in a separation agreement. This agreement should guide all decisions, including how you choose tenants, how to handle vacancies, save for repairs, and decide when to sell– what circumstances would trigger a sale; and how to arrive at the decision to sell their home.
This option can protect long-term value, but it extends your financial link with your former partner. It works best for people who communicate clearly, keep records, and follow a written plan.
Which is the best approach?
It depends on your goals and what’s possible. Here’s a summary of the pros and cons:
| Option | Pros | Cons |
|---|---|---|
| Sell | Quick financial split | Must agree on offers |
| Buyout | Stability for one partner | Mortgage qualification |
| Rent | Delayed sale, income | Ongoing partnership |
The Financial, Lifestyle, Property and Housing Opportunities That Come With A Divorce
- A divorce can lead to one or both spouses getting a smaller and easier to manage home; or a condo.
- The proceeds of a house sale could eliminate personal debt.
- The sale of a home could allow a person to move to a more affordable community. Victoria has a bad reputation for being some of the most expensive communities in Canada. Up-island, there may be more affordable housing waiting for a newly divorced person looking for a fresh start.